Portman Ridge and Logan Ridge Set to Merge Under BC Partners

Deal News | Jan 30, 2025 | EIN

Portman Ridge and Logan Ridge Set to Merge Under BC Partners

Portman Ridge Finance Corporation (PTMN) and Logan Ridge Finance Corporation (LRFC), two business development companies (BDCs) managed by affiliates of BC Partners Advisors L.P., have announced a merger agreement where LRFC will merge with and into PTMN. The combined entity will be managed by Sierra Crest Investment Management LLC and will trade on NASDAQ under the symbol PTMN. The merger, subject to shareholder approvals, will result in a significant increase in size and scale, with anticipated asset totals exceeding $600 million and a net asset value around $270 million. The merger is expected to be accretive to PTMN's net asset value and net investment income, offering potential operating efficiencies and increased borrowing capacity. Shareholders of LRFC will receive 1.50 newly issued shares of PTMN for each LRFC share based on a fixed exchange ratio, with the merger expected to close in the second quarter of 2025. Financial advisors and legal counsels have been engaged to facilitate the merger process.

Sectors

  • Finance & Investment
  • Mergers & Acquisitions

Geography

  • United States – Both Portman Ridge Finance Corporation and Logan Ridge Finance Corporation are based in the U.S., with relevant activities occurring under U.S. financial regulations.

Industry

  • Finance & Investment – The article involves business development companies (BDCs) involved in finance and investment, specifically under the management of BC Partners.
  • Mergers & Acquisitions – The primary focus of the article is the merger agreement between Portman Ridge Finance Corporation and Logan Ridge Finance Corporation.

Financials

  • $600 million – Expected total assets post-merger based on balance sheets as of September 30, 2024.
  • $270 million – Expected net asset value (NAV) post-merger adjusted for transaction expenses.
  • 4% – Premium to LRFC's January 24, 2025, closing price as part of the merger consideration.
  • 17% – Premium to LRFC's price on September 11, 2024, in the merger consideration.
  • $2.8 million – Annual operating expense efficiencies expected post-merger.
  • $1.5 million – Incentive fees waiver over eight quarters post-merger by Sierra Crest.

Participants

NameRoleTypeDescription
Portman Ridge Finance CorporationTarget & Surviving EntityCompanyA publicly traded investment company involved in the merger, which will be the surviving entity post-merger.
Logan Ridge Finance CorporationTargetCompanyA BDC merging into Portman Ridge Finance Corporation as part of the proposed transaction.
BC Partners Advisors L.P.Investment ManagerCompanyThe investment firm managing affiliates concerning both BDCs involved in the merger.
Sierra Crest Investment Management, LLCInvestment ManagerCompanyThe external investment manager for PTMN who will manage the combined entity post-merger.
Keefe, Bruyette & Woods, A Stifel CompanyFinancial AdvisorCompanyThey served as a financial advisor to the Special Committee of PTMN for the merger.
Houlihan LokeyFinancial AdvisorCompanyThey served as a financial advisor to the Special Committee of LRFC for the merger.
Stradley Ronon Stevens & Young, LLPLegal AdvisorCompanyLegal counsel to the Special Committee of PTMN.
Skadden, Arps, Slate, Meagher & Flom LLPLegal AdvisorCompanyLegal counsel to the Special Committee of LRFC.
Simpson Thacher & Bartlett LLPLegal AdvisorCompanyLegal counsel to both PTMN and LRFC with respect to the transaction.
Dechert LLPLegal AdvisorCompanyLegal counsel to PTMN and LRFC.